Despite April Stumble, Positive Stock-Market Outlook for 2024

Monday Tee Up: A Big Week

With earnings season in full swing and the volume of insider transactions reported by Vickers Stock Research at extreme lows (as insiders are broadly prohibited from trading right now), it would be easy to say 'nothing to see here.' But there are certain items of interest in the weekly insider-transaction data from Vickers.

This pick list highlights constituents of the Morningstar US Large Cap Index that we believe offer investors the best risk-adjusted return prospects. Stocks of large-cap companies where neither growth nor value characteristics predominate. Stocks in the top 70% of the capitalization of the U.S. equity market are defined as large cap.

This pick list highlights constituents of the Morningstar US Large Cap Index that we believe offer investors the best risk-adjusted return prospects. Stocks of large-cap companies where neither growth nor value characteristics predominate. Stocks in the top 70% of the capitalization of the U.S. equity market are defined as large cap.

This pick list highlights constituents of the Morningstar US Large Cap Index that we believe offer investors the best risk-adjusted return prospects. Stocks of large-cap companies where neither growth nor value characteristics predominate. Stocks in the top 70% of the capitalization of the U.S. equity market are defined as large cap.

Stocks fell sharply on Wednesday morning after Fitch Ratings surprised investors by downgrading U.S. government debt. Fitch lowered its rating on U.S. debt to AA+ from AAA, citing 'expected fiscal deterioration' over the next three years, a rising debt burden, and repeated political standoffs over the debt ceiling. The White House and the Treasury Department strongly disagreed with the decision, with Treasury Secretary Yellen stating that it was 'arbitrary and based on outdated data.' The Dow fell 0.8%, the S&P 1.3%, and the Nasdaq 2.0%. Crude oil fell more than 2% to $79.50 per barrel, while gold fell $7 to $1972 per ounce.

We have raised our intermediate-term technical outlook to neutral. The Teflon stock market continues to crawl higher in the face of bearish daily momentum divergences and, in some cases, extreme bullish sentiment. This is typical action in the early stages of a bull market. However, it took 164 days for the S&P 500 (SPX) to gain 20%, far longer than almost every other bull market in the past -- so we thought we were dealing with a market that might remain range bound. That hasn't been the case, as the major indices have dealt extremely well with some key areas of chart resistance as well as various important Fibonacci retracement levels.

This pick list highlights constituents of the Morningstar US Large Cap Index that we believe offer investors the best risk-adjusted return prospects. Stocks of large-cap companies where neither growth nor value characteristics predominate. Stocks in the top 70% of the capitalization of the U.S. equity market are defined as large cap.

This pick list highlights constituents of the Morningstar US Large Cap Index that we believe offer investors the best risk-adjusted return prospects. Stocks of large-cap companies where neither growth nor value characteristics predominate. Stocks in the top 70% of the capitalization of the U.S. equity market are defined as large cap.

The major indices were little changed on Friday morning, as gains in the Consumer Discretionary and Staples sectors were offset by declines in Financials, Energy, and Materials. On the earnings front, Procter & Gamble shares rose more than 3% after the company posted better-than-expected fiscal 3Q earnings, helped by price increases and strong sales of new products, and raised its full-year sales forecast. Hospital operator HCA Healthcare also rose 5% after reporting strong 1Q results and raising its sales and earnings guidance. The Dow fell 0.1%, the S&P fell 0.1% and the Nasdaq was flat. Crude oil rose to $78 per barrel, while gold dropped $31 to $1988 per ounce.

Stocks rose strongly on Thursday as investors weighed more 4Q earnings reports and new GDP and employment data. The Commerce Department said that the U.S. economy expanded at a 2.9% rate in 4Q, helped by significant growth in inventories. The reading was above the consensus estimate of 2.6% growth, though down from 3.2% in the third quarter. On the employment front, first-time claims for state unemployment benefits fell by 6,000 to 186,000 for the week ended January 14. The Dow rose 0.61%, the S&P 1.10%, and the Nasdaq 1.76%. Crude oil traded near $81 per barrel, while gold fell to $1930 per ounce.

November Rally in a Reshaped Market: Our Monthly Survey of the Economy, Interest Rates, and Stocks

Stocks finished lower on Thursday after giving up early gains, as investors weighed mixed earnings reports along with new employment and housing market data. First-time claims for state unemployment benefits fell by 12,000 to 214,000 for the week ended October 15, below the Bloomberg consensus forecast of 230,000. Continuing claims rose by 21,000 to 1.385 million. On the housing front, existing home sales fell 1.5% in September to an annualized 4.71 million units, slightly above the consensus estimate. The Dow fell 0.30%, the S&P 0.80%, and the Nasdaq 0.61%. Crude oil rose to $86 per barrel, while gold fell slightly to $1633 per ounce.

Stocks were mixed on Friday morning, as gains in most sectors were offset by sharp declines in Communication Services. Snap shares fell more than 35% after the social media company missed its already lowered revenue guidance. Verizon also fell 6% after posting below-consensus EPS and lowering its full-year guidance. On the positive side, American Express rose nearly 5% after reporting better-than-expected 2Q results. The Dow rose 0.3%, the S&P was flat, and the NASDAQ fell 0.4%. Crude oil rose slightly to $97 per barrel, while gold traded near $1730 per ounce.

Stocks were mixed on Friday morning, as gains in most sectors were offset by sharp declines in Communication Services. Snap shares fell more than 35% after the social media company missed its already lowered revenue guidance. Verizon also fell 6% after posting below-consensus EPS and lowering its full-year guidance. On the positive side, American Express rose nearly 5% after reporting better-than-expected 2Q results. The Dow rose 0.3%, the S&P was flat, and the NASDAQ fell 0.4%. Crude oil rose slightly to $97 per barrel, while gold traded near $1730 per ounce.

Stocks have struggled in 2Q 2022, with the S&P 500 on its way to a double-digit drop for the period. Absent the rally in recent days, the decline would be closer to 20%. Growth stocks have again been the weakest performers, as sectors such as Technology, Communication Services, and Consumer Discretionary all have lagged the major market indices. The leading sectors were value-oriented, including Energy, Consumer Staples, Basic Materials, and Utilities. The average stock in the Argus Universe of Coverage has declined 13.1% thus far during the quarter, and the median stock declined 12.5%. The average BUY-rated stock dropped 12.6%, while the average HOLD-rated stock fell 14.4%. Will investors continue to favor value in 2022? Will high inflation drive continued outperformance in Energy and Basic Materials? Given interest rates that remain historically low, we expect growth stocks to resume outperformance over time, and think 2022 may be a "one-in-five year" that value leads. Investors seeking value are encouraged to focus on dividends and look for yields in the 3%-4% range. Concerning sectors, our current Over-Weights are Energy, Financial, Healthcare, Industrials, and Basic Materials. Here are the top-10 and bottom-five performers from the Argus Universe in 2Q.

Stocks fell sharply on Friday morning, a day after Fed Chair Jerome Powell said that a 50-basis-point rate hike would be 'on the table' in May. The comments contributed to a sharp afternoon selloff on Thursday. On the earnings front, American Express shares fell despite stronger-than-expected 1Q earnings, as the company did not raise its full-year guidance. Verizon shares also fell after the company said that 2022 earnings would come in toward the low end of its previous guidance range. The Dow fell 1.4%, the S&P 1.2%, and the Nasdaq 0.8%. Crude oil fell to $102 per barrel, while gold traded near $1929 per ounce.

Stocks were mixed on Thursday morning amid earnings reports from major banks and a new bid for Twitter from Elon Musk. On the employment front, the Labor Department said that first-time claims for state unemployment benefits rose to 185,000 for the week ended April 9, up from 167,000 a week earlier and above the Bloomberg consensus of 170,000. Continuing claims fell to 1.475 million, down from 1.523 million a week earlier and below the consensus forecast. The Dow rose 0.4%, the S&P fell 0.3%, and the Nasdaq fell 1.0%. Crude oil fell 1% to $103 per barrel, while gold fell $13 to $1972 per ounce.

Stocks rose strongly on Friday morning, led by the Technology and Communication Services sectors, after recovering from sharp early losses. But there were more signs of accelerating inflation. The Commerce Department said that its personal consumption expenditures index rose 5.8% from the prior year in December, up from 5.7% growth in November and in line with the Bloomberg consensus forecast. The Dow rose 0.5%, the S&P 1.2%, and the Nasdaq 2.0%. Crude oil rose more than 1% to $88 per barrel, while gold traded near $1786 per ounce.

This pick list highlights constituents of the Morningstar US Large Cap Index that we believe offer investors the best risk-adjusted return prospects. Stocks of large-cap companies where neither growth nor value characteristics predominate. Stocks in the top 70% of the capitalization of the U.S. equity market are defined as large cap.

The stock market moved higher last week as earnings season picked up steam. Tech stocks outperformed blue chips, though the margin of outperformance was slim owing to disappointing earnings from some tech names. During Friday's session, the Dow Jones Industrial Average increased 74 points, or 0.21%. The S&P 500 was down 0.11%, and the Nasdaq Composite was down 0.82%. For the week, the DJIA was up 382 points, or 1.08%, the S&P 500 was up 1.64%, and the Nasdaq Composite was up 1.29%. Year-to-date, the DJIA is up 16.57%, the S&P 500 is up 21.00%, and the Nasdaq Composite is up 17.08%.

This pick list highlights constituents of the Morningstar US Large Cap Index that we believe offer investors the best risk-adjusted return prospects. Stocks of large-cap companies where neither growth nor value characteristics predominate. Stocks in the top 70% of the capitalization of the U.S. equity market are defined as large cap.

This edition features digital adversiting and regulatory risk; our quarterly telecom outlook; new coverage of backup power leader Generac; and notes from Continental, Goldman Sachs, and Boston Beer.

This edition features edge computing; utilities' role in green energy; AIG's valuation; and notes from RH, SEI Investments, and Lululemon.

This pick list highlights constituents of the Morningstar US Large Cap Index that we believe offer investors the best risk-adjusted return prospects. Stocks of large-cap companies where neither growth nor value characteristics predominate. Stocks in the top 70% of the capitalization of the U.S. equity market are defined as large cap.

This pick list highlights constituents of the Morningstar US Large Cap Index that we believe offer investors the best risk-adjusted return prospects. Stocks of large-cap companies where neither growth nor value characteristics predominate. Stocks in the top 70% of the capitalization of the U.S. equity market are defined as large cap.

Corporate insiders continue to show relative indifference to equities, neither buying nor selling aggressively. We've used this space to suggest that current insider sentiment is not surprising, given that major stock indices are at all-time highs. Still, valuations could become more appealing if corporate earnings continue to rise and global economies continue to recover. With that in mind, current insider sentiment seems reasonable. But is it in keeping with historical behavior?

This pick list highlights constituents of the Morningstar US Large Cap Index that we believe offer investors the best risk-adjusted return prospects. Stocks of large-cap companies where neither growth nor value characteristics predominate. Stocks in the top 70% of the capitalization of the U.S. equity market are defined as large cap.

This pick list highlights constituents of the Morningstar US Large Cap Index that we believe offer investors the best risk-adjusted return prospects. Stocks of large-cap companies where neither growth nor value characteristics predominate. Stocks in the top 70% of the capitalization of the U.S. equity market are defined as large cap.

The Vickers Top Buyers & Sellers is a daily report that identifies the five companies the largest insider purchase transactions based on the dollar value of the transactions as well as the five companies the largest insider sales transactions based on the dollar value of the transactions.

Stocks were mixed on Tuesday morning following earnings reports from major retailers and new housing market data. Walmart shares rose 2% after the company reported better-than-expected 1Q sales and earnings and raised its full-year guidance. Macy's shares also rose following an unexpected first-quarter profit. The Commerce Department said that U.S. housing starts fell 9.5% to a seasonally adjusted annual rate of 1.569 million units in April, down from 1.733 million in March and below the Reuters consensus forecast of 1.71 million. The Dow fell 0.2%, the S&P was flat, and the Nasdaq rose 0.7%. Crude oil traded near $66 per barrel, while gold fell slightly to $1868 per ounce.

Stocks were mixed on Tuesday morning following earnings reports from major retailers and new housing market data. Walmart shares rose 2% after the company reported better-than-expected 1Q sales and earnings and raised its full-year guidance. Macy's shares also rose following an unexpected first-quarter profit. The Commerce Department said that U.S. housing starts fell 9.5% to a seasonally adjusted annual rate of 1.569 million units in April, down from 1.733 million in March and below the Reuters consensus forecast of 1.71 million. The Dow fell 0.2%, the S&P was flat, and the Nasdaq rose 0.7%. Crude oil traded near $66 per barrel, while gold fell slightly to $1868 per ounce.

The stock market moved lower last week, then rallied on Friday, ultimately finishing flat-to-down. Tech stocks and blue chips performed similarly, with tech narrowly outperforming. During Friday's session, the Dow Jones Industrial Average increased 228 points, or 0.67%. The S&P 500 was up 1.09%, and the Nasdaq Composite was up 1.44%. For the week, the DJIA was down 0.46%, the S&P 500 was up 0.13%, and the Nasdaq Composite was down 0.25%. Year-to-date, the DJIA is up 11.23%, the S&P 500 is up 11.29%, and the Nasdaq Composite is up 8.76%.

We recently raised our rating on the Communication Services sector to Over-Weight. In this barbell sector, media and entertainment companies should benefit from robust online activity and the reopening of theme parks and movie theaters. Providers of telecom services should benefit from ARPU gains as the 5G rollout gains traction. The style mix of the sector is approximately one-third value and two-thirds growth. The adjusted pro-forma beta is approximately 1.1 (like the old telecoms), while the yield is 0.9% (reflecting the impact of Google and Facebook). The smoothed growth rate is 7% and the P/E ratio is 21x. The sector accounts for 11% of the S&P 500. We think investors should consider allocating 12%-14% of diversified portfolios to the sector. Here are some of our top picks.

This pick list highlights constituents of the Morningstar US Large Cap Index that we believe offer investors the best risk-adjusted return prospects. Stocks of large-cap companies where neither growth nor value characteristics predominate. Stocks in the top 70% of the capitalization of the U.S. equity market are defined as large cap.

The stock market dropped last week, as surging bond yields signaled tighter lending conditions may lie ahead. Tech stocks were the hardest hit and the Nasdaq recorded its worst week since October-though blue chips certainly weren't spared. During Friday's session, the Dow Jones Industrial Average fell 470 points, or 1.50%. The S&P 500 was down 0.48%, and the Nasdaq Composite increased 0.56%. For the week, the DJIA dropped 562 points, or 1.78%, the S&P 500 was down 2.45%, and the Nasdaq Composite was down 4.92%. For the year-to-date, the DJIA is up 1.06%, the S&P 500 is up 1.47%, and the Nasdaq Composite is up 2.36%.

Vickers Stock Research, a subsidiary of Argus Research Group, tracks and analyzes insider trading and institutional ownership trends. Form 13-Fs are due 45 days after the end of calendar quarters, and are now coming in from 4Q20. We review the 13Fs of the major activist investors, including Carl Icahn, Trian Fund Management, Jana Partners, and ValueAct Holdings, among others. Activist investing has evolved and is now less about generating a short-term return on an underpriced stock and more about achieving long-term returns through an active management/investor partnership. Here are some recent new purchases and key holdings of activist investors, according to Vickers.

Stocks sold off last week, due in part to frenzied trading in certain corners of the market, along with FOMC commentary that highlighted a slowing recovery. The general public took special note of this week's equity market drama, with Google search interest for 'stock market' at its highest levels since March 2020. Blue-chips fared slightly better than tech stocks during the slide. On Friday, The Dow Jones Industrial Average fell 621 points, or 2.03%. The S&P 500 was down 1.93% and the Nasdaq Composite was down 2.00%. For the week, the DJIA fell 3.27%, the S&P 500 dropped 3.31%, and the Nasdaq Composite sunk 3.49%.